Markets opened lower on Tuesday amid a decline in crude prices that dragged lower many energy stocks. However, several stocks, including Sunedison Inc (NYSE:SUNE), TerraForm Global Inc (NASDAQ:GLBL), California Resources Corp (NYSE:CRC), Seadrill Ltd (NYSE:SDRL), and Medivation Inc (NASDAQ:MDVN), registered more significant losses on the back of various developments. In this article we are going to take a closer look at the reasons behind the declines of these stocks and see what the smart money investors from our database think about them.
At Insider Monkey, we track around 785 hedge funds and other institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
Sunedison Inc (NYSE:SUNE) stock has plunged by more than 50% after one of its yieldcos, TerraForm Global, said that there is a chance that the solar company would file for bankrupcy. According to TerraForm, SunEdison has not done the financial reporting appropriately and has not worked on several projects in India and Uruguay. TerraForm also claimed that Sunedison is facing difficulties in terms of liquidity. The news came right after the Wall Street Journal reported that the US Securities and Exchange Commission is investigating Sunedison Inc (NYSE:SUNE)’s disclosures about its cash position. Overall, 50 funds among those we track amassed around 31.80% of Sunedison Inc (NYSE:SUNE)’s outstanding stock as of the end of 2015. Among them, activist David Einhorn’s Greenlight Capital owns approximately 18 million shares of the company.
TerraForm Global Inc (NASDAQ:GLBL)’s stock has dropped by 20% amid Sunedison’s decline an after it announced that it would delay the filing of its annual report. At the end of the fourth quarter, 21 hedge funds we track held positions in TerraForm, down from 23 funds from a quarter earlier, while the total value of their holdings decreased to approximately $173 million from $251 during the quarter and represented some 17.40% of the TerraForm’s stock. Billionaire Leon Cooperman’s Omega Advisors owns 6.01 million shares of TerrafForm Global, according to its last 13F filing.